March 26, 2015 - 7:30 AM
Pundits proclaiming the proposed KGHM Ajax Mine will put a damper on real estate in Kamloops are ignoring the latest housing stats for the city. They argue a mine would deter people from living in Kamloops and real estate prices will plunge. Meanwhile, there is ample evidence the proposed mine is not deterring investment.
Building permits in Kamloops for residential units increased by 80 per cent in February compared to the previous year. In the first two months of 2015 there was $15.8 million in residential building permits compared to $8.3 million in 2014. There was $13.5 million in commercial building permits issued in the first two months of 2015 compared to $7.1 million in commercial building permits for the same period in 2014.
The strong construction sector in Kamloops is doubly impressive when the provincial and national numbers are considered. Housing starts have seen widespread drops across Canada, from 171,950 new home starts in January 2015 to just 140,722 starts in February. In B.C. the total value of building permits fell 24.2 per cent two $768 million in December 2014 to $1 billion and was down 15.5 per cent year over year.
The slowdown nationally and provincially in housing starts is at least in part due to the drop in oil prices. Kamloops has been impacted by the slowdown in this oil industry, such as loss of jobs at Horizon North, and individuals who commute to the oil sands losing jobs. Yes, some jobs in Kamloops tied to the oil sector (or those commuting to jobs from Kamloops) may have been lost because of the lower oil prices, but there are enough other things happening in Kamloops, such as forestry, mining, transportation and TRU, to provide a cushion. The fact Kamloops’ construction sector is still thriving is testimony to the diversity of the city’s economy.
Going forward, I predict a continued strong construction sector. Kamloops economy is diverse, so even when there is a slowdown in one sector, other sectors pick up the slack. People go where there are jobs. People buy when they feel hopeful about the future. People stay because of amenities. The increase in new residential construction in Kamloops points to a solid economy, a positive outlook, and a city where people want to live.
The KGHM mine would strengthen the diversity of Kamloops’ economy. But it will not make or break the city if it does or doesn’t go ahead. The continued investment in the city leading up to the possible opening of the mine points to overall optimism in the city’s future. It does not point to, as the pundits will say, a decrease in real estate prices.
If the KGHM mine goes ahead it will definitely deter some people from moving to Kamloops, and convince others to leave. But to predict a decrease in housing prices ignores the most fundamental principles. A strong, diverse economy attracts people to live and work in a city and because of that there will be far more people wanting to live in Kamloops than not if the mine goes ahead.
— Nancy Bepple is a recovering politician and local news junkie. She expects she will never recover from her love of the banjo.
News from © InfoTel News Ltd, 2015